Financial Releases

Qorvo® Announces Fiscal 2017 Fourth Quarter Results

Fiscal 2017 Annual Revenue Exceeds $3 Billion, Up 16% Year-Over-Year, Driven by 23% Growth in Infrastructure and Defense Products and 14% Growth in Mobile Products

GREENSBORO, N.C., May 03, 2017 (GLOBE NEWSWIRE) -- Qorvo (Nasdaq:QRVO), a leading provider of innovative RF solutions that connect the world, today announced financial results for the Company's fiscal 2017 fourth quarter, ended April 1, 2017. On a GAAP basis, fiscal 2017 fourth quarter revenue increased 5.7% year-over-year to $643.0 million.  Gross margin was 36.0%, operating loss was $24.5 million, and diluted EPS was $0.43. On a non-GAAP basis, fiscal 2017 fourth quarter revenue was $642.0 million, gross margin was 46.2%, operating income was $133.4 million, or 20.8% of sales, and diluted EPS was $0.85.

Quarterly Highlights

  • Shipped first BAW 5-based filter, in RF Fusion™ WiFi solution, in support of Xiaomi®, Oppo® and Vivo®

  • First to achieve full certification from MediaTek® for an integrated module covering low, mid and high bands

  • Supported ZTE® with full suite of low-, mid- and high-band RF Fusion placements

  • Commenced shipments of Power Class 2 solutions to Sony®, LG® and HTC®, and secured design wins for Power Class 2-capable RF Flex™ and high-band RF Fusion solutions

  • Secured an important 802.11ac design win in a Sonos® sound bar for home audio networks

  • Achieved over 20% year-over-year growth in Defense & Aerospace with strength in GaN-based power amplifiers

  • Expanded optical product portfolio with release of phase amplitude modulation 4 (PAM4) products for data centers

"For fiscal year 2017, Qorvo delivered revenue of $3 billion, up 16% year-over-year, with 23% growth in IDP and 14% growth in Mobile Products. We are very proud of what the team achieved, and we expect continued strong revenue growth and margin expansion in fiscal year 2018," said Bob Bruggeworth, president and chief executive officer of Qorvo. "In the March quarter, we continued to extend our product and technology leadership. We collaborated with all major infrastructure OEMs on next-generation 4G and pre-5G macro base station GaN PAs, we supported 1 Gbps throughput in the ZTE® Gigabit smartphone, we supplied the industry's first 5G RF front end in collaboration with Intel®, and we achieved full certification of the first single-placement integrated module covering low, mid and high bands on a MediaTek baseband."

Financial Commentary and Outlook

Mark Murphy, chief financial officer of Qorvo, said, "In the fourth quarter, Qorvo delivered revenue and margins above consensus and earnings at the high end of our guidance range. While our June quarter guidance reflects weaker than anticipated near-term demand in China, we see strong revenue growth, gross and operating margin expansion, and a doubling of free cash flow for fiscal year 2018."

Qorvo currently expects the demand environment in its end markets supports the following non-GAAP expectations for the June 2017 quarter:

  • Quarterly revenue in the range of $610 million to $650 million

  • Gross margin of approximately 47%

  • A tax rate below 10%

  • Diluted EPS in the range of $0.70 to $0.90

Qorvo's actual quarterly results may differ from these expectations and projections, and such differences may be material.

Selected Financial Information

The following tables set forth selected GAAP and non-GAAP financial information for Qorvo for the periods indicated. See the more detailed financial information for Qorvo, including reconciliation of GAAP and non-GAAP financial information, attached.

    
  SELECTED GAAP RESULTS 
    (Unaudited)   
  (In millions, except for percentages and EPS) 
   For the quarter
ended April 1,
2017
 For the quarter
ended December 31,
2016
 Change vs. Q3
FY 2017
 
Revenue$643.0 $826.3 $(183.3) 
Gross profit$231.6 $310.6 $(79.0) 
Gross margin 36.0% 37.6% -1.6ppt 
Operating expenses$256.1 $249.2 $6.9  
Operating (loss) income$(24.5)$61.4 $(85.9) 
Net income (loss)$55.9 $(78.6)$134.5  
Weighted average diluted shares 131.0  126.9  4.1  
Diluted EPS$0.43 $(0.62)$1.05  


    
  SELECTED NON-GAAP RESULTS1 
     (Unaudited)   
  (In millions, except for percentages and EPS) 
  For the quarter
ended April 1,
2017
 For the quarter
ended December 31,
2016
 Change vs. Q3
FY 2017
 
Revenue$642.0  $825.4 $(183.4) 
Gross profit$296.5 $365.8 $(69.3) 
Gross margin 46.2% 44.3% 1.9ppt  
Operating expenses$163.1 $157.1 $6.0  
Operating income$133.4  $208.7 $(75.3) 
Net income$111.7 $177.3 $(65.6) 
Weighted average diluted shares 131.0  131.5  (0.5) 
Diluted EPS$0.85 $1.35 $(0.50) 


    
  SELECTED GAAP RESULTS 
    (Unaudited)   
  (In millions, except for percentages and EPS) 
  For the quarter
ended April 1,
2017
 For the quarter
ended April 2,
2016
 Change vs. Q4
FY 2016
 
Revenue$643.0 $608.1 $34.9  
Gross profit$231.6 $254.2 $(22.6) 
Gross margin 36.0% 41.8% -5.8ppt 
Operating expenses$256.1 $245.7 $10.4  
Operating (loss) income$(24.5)$8.5 $(33.0) 
Net income (loss)$55.9 $(24.2)$80.1  
Weighted average diluted shares 131.0  132.7  (1.7) 
Diluted EPS$0.43 $(0.18)$0.61  


  SELECTED NON-GAAP RESULTS1 
    (Unaudited)   
  (In millions, except for percentages and EPS) 
  For the quarter
ended April 1,
2017
 For the quarter
ended April 2,
2016
 Change vs. Q4
FY 2016
 
Revenue$642.0 $607.1 $34.9  
Gross profit$296.5 $303.5 $(7.0) 
Gross margin 46.2% 50.0% -3.8ppt 
Operating expenses$163.1 $142.9 $20.2  
Operating income$133.4 $160.6 $(27.2) 
Net income$111.7 $142.6 $(30.9) 
Weighted average diluted shares 131.0  137.5  (6.5) 
Diluted EPS$0.85 $1.04 $(0.19) 

1Excludes stock-based compensation, amortization of intangibles, acquisition and integration related costs, intellectual property rights (IPR) litigation costs, non-cash deferred royalty revenue and equal and offsetting non-cash prepaid royalty amortization, start-up costs, restructuring and disposal costs, loss (gain) on assets, loss (gain) on investment, and an adjustment of income taxes.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains some or all of the following non-GAAP financial measures: (i) non-GAAP revenue, (ii) non-GAAP gross profit and gross margin, (iii) non-GAAP operating income and operating margin, (iv) non-GAAP net income, (v) non-GAAP net income per diluted share, (vi) non-GAAP operating expenses (research and development; selling, general and administrative), (vii) free cash flow, (viii) EBITDA, (ix) non-GAAP return on invested capital (ROIC), and (x) net debt or positive net cash.  Each of these non-GAAP financial measures is either adjusted from GAAP results to exclude certain expenses or derived from multiple GAAP measures, which are outlined in the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables, attached, and the "Additional Selected Non-GAAP Financial Measures and Reconciliations" tables, attached.

In managing Qorvo's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures.  In developing and monitoring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing gross margin and operating margin.  In addition, management relies upon these non-GAAP financial measures to assess whether research and development efforts are at an appropriate level, and when making decisions about product spending, administrative budgets, and other operating expenses.  Also, we believe that non-GAAP financial measures provide useful supplemental information to investors and enable investors to analyze the results of operations in the same way as management.  We have chosen to provide this supplemental information to enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses and stock-based compensation expense, which may obscure trends in Qorvo's underlying performance.

We believe that these non-GAAP financial measures offer an additional view of Qorvo's operations that, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of Qorvo's results of operations and the factors and trends affecting Qorvo's business.  However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Our rationale for using these non-GAAP financial measures, as well as their impact on the presentation of Qorvo's operations, are outlined below:

Non-GAAP revenue.  Non-GAAP revenue excludes non-cash deferred royalty revenue.  We believe that the exclusion of this non-cash adjustment to revenue provides management and investors a more effective means of evaluating our historical and projected performance.

Non-GAAP gross profit and gross margin.  Non-GAAP gross profit and gross margin exclude stock-based compensation expense, amortization of intangible assets, non-cash deferred royalty revenue, non-cash prepaid royalty amortization, and certain non-cash expenses.  We believe that exclusion of these costs in presenting non-GAAP gross profit and gross margin gives management and investors a more effective means of evaluating Qorvo's historical performance and projected costs and the potential for realizing cost efficiencies.  We believe that the majority of Qorvo's purchased intangibles are not relevant to analyzing current operations because they generally represent costs incurred by the acquired company to build value prior to acquisition, and thus are effectively part of transaction costs rather than ongoing costs of operating Qorvo's business.  In this regard, we note that (i) once the intangibles are fully amortized, the intangibles will not be replaced with cash costs and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time, and (ii) although we set the amortization expense based on useful life of the various assets at the time of the transaction, we cannot influence the timing and amount of the future amortization expense recognition once the lives are established.  Similarly, we believe that presentation of non-GAAP gross profit and gross margin and other non-GAAP financial measures that exclude the impact of stock-based compensation expense assists management and investors in evaluating the period-over-period performance of Qorvo's ongoing operations because (i) the expenses are non-cash in nature, and (ii) although the size of the grants is within our control, the amount of expense varies depending on factors such as short-term fluctuations in stock price volatility and prevailing interest rates, which can be unrelated to the operational performance of Qorvo during the period in which the expense is incurred and generally are outside the control of management.  Moreover, we believe that the exclusion of stock-based compensation expense in presenting non-GAAP gross profit and gross margin and other non-GAAP financial measures is useful to investors to understand the impact of the expensing of stock-based compensation to Qorvo's gross profit and gross margins and other financial measures in comparison to both prior periods as well as to its competitors.  We also believe that the adjustments to profit and margin related to non-cash deferred royalty revenue, non-cash prepaid royalty amortization, restructuring and disposal costs and certain non-cash expenses do not constitute part of Qorvo's ongoing operations and therefore the exclusion of these items provides management and investors with better visibility into the actual revenue and actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP gross profit and gross margin has economic substance because the excluded expenses do not represent continuing cash expenditures and, as described above, we have little control over the timing and amount of the expenses in question.

Non-GAAP operating income and operating margin.  Non-GAAP operating income and operating margin exclude stock-based compensation expense, amortization of intangible assets, restructuring and disposal costs, acquisition and integration related costs, intellectual property rights (IPR) litigation costs, loss (gain) on assets, start-up costs and certain non-cash expenses.  We believe that presentation of a measure of operating income and operating margin that excludes amortization of intangible assets and stock-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin.  We believe that restructuring and disposal costs, acquisition and integration related costs, IPR litigation costs, loss (gain) on assets, start-up costs and certain non-cash expenses do not constitute part of Qorvo's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of non-GAAP operating income and operating margin has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

Non-GAAP net income and non-GAAP net income per diluted share.  Non-GAAP net income and non-GAAP net income per diluted share exclude the effects of stock-based compensation expense, amortization of intangible assets, restructuring and disposal costs, acquisition and integration related costs, IPR litigation costs, loss (gain) on assets, start-up costs, certain non-cash expenses, loss on investment and also reflect an adjustment of income taxes.  The income tax adjustment primarily represents the use of net operating loss and research and development tax credit carryforwards, deferred tax expense not affecting taxes payable, tax deductible stock-based compensation expense in excess of GAAP stock-based compensation expense, and non-cash expense (benefit) related to uncertain tax positions.  We believe that presentation of measures of net income and net income per diluted share that exclude these items is useful to both management and investors for the reasons described above with respect to non-GAAP gross profit and gross margin and non-GAAP operating income and operating margin.  We believe disclosure of non-GAAP net income and non-GAAP net income per diluted share has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

Non-GAAP research and development and selling, general and administrative expenses.  Non-GAAP research and development and selling, general and administrative expenses exclude stock-based compensation expense, amortization of intangible assets, acquisition and integration related costs, IPR litigation costs and certain non-cash expenses.  We believe that presentation of measures of these operating expenses that exclude amortization of intangible assets and stock-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin.  We believe that acquisition and integration related costs and IPR litigation costs do not constitute part of Qorvo's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and gives management and investors a more effective means of evaluating our historical and projected performance.  We believe disclosure of these non-GAAP operating expenses has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

Free cash flowQorvo defines free cash flow as net cash provided by operating activities during the period minus property and equipment expenditures made during the period.  We use free cash flow as a supplemental financial measure in our evaluation of liquidity and financial strength.  Management believes that this measure is useful as an indicator of our ability to service our debt, meet other payment obligations and make strategic investments.  Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.  Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations.  Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.

EBITDA Qorvo defines EBITDA as earnings before interest expense and interest income, income tax expense (benefit), depreciation and intangible amortization.  Management believes that this measure is useful to evaluate our ongoing operations and as a general indicator of our operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges).

Non-GAAP ROIC.  Return on invested capital (ROIC) is a non-GAAP financial measure that management believes provides useful supplemental information for management and the investor by measuring the effectiveness of our operations' use of invested capital to generate profits.  We use ROIC to track how much value we are creating for our shareholders.  Non-GAAP ROIC is calculated by dividing annualized non-GAAP operating income, net of an adjustment for income taxes (as described above), by average invested capital.  Average invested capital is calculated by subtracting the average of the beginning balance and the ending balance of current liabilities (excluding the current portion of long-term debt and other short-term financings) from the average of the beginning balance and the ending balance of net accounts receivable, inventories, other current assets, net property and equipment and a cash amount equal to seven days of quarterly revenue.

Net debt or positive net cash.  Net debt or positive net cash is defined as unrestricted cash, cash equivalents and short-term investments minus any borrowings under our credit facility and the principal balance of our senior unsecured notes.  Management believes that net debt or positive net cash provides useful information regarding the level of Qorvo's indebtedness by reflecting cash and investments that could be used to repay debt.

Forward-looking non-GAAP measures. Our earnings release contains forward-looking non-GAAP revenue, gross margin, income tax rate and diluted earnings per share.  We provide these non-GAAP measures to investors on a prospective basis for the same reasons (set forth above) that we provide them to investors on a historical basis.  GAAP revenue is expected to reconcile within $1.0 million of the quarterly forecasted non-GAAP revenue.  We are unable to provide a reconciliation of the remaining forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because due to variability and difficulty in making accurate projections for items such as stock-based compensation, integration related costs, restructuring charges and the provision for income taxes, we are unable to quantify certain amounts that would be required to be included in the GAAP measures without unreasonable effort. We believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

Limitations of non-GAAP financial measures.  The primary material limitations associated with the use of non-GAAP revenue, non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow, EBITDA, non-GAAP ROIC and net debt or positive net cash, as an analytical tool compared to the most directly comparable GAAP financial measures of gross profit and gross margin, operating expenses, operating income, net income, diluted earnings per share and net cash provided by operating activities are (i) they may not be comparable to similarly titled measures used by other companies in our industry, and (ii) they exclude financial information that some may consider important in evaluating our performance, thus limiting their usefulness as a comparative tool.  We compensate for these limitations by providing full disclosure of the differences between these non-GAAP financial measures and the corresponding GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, to enable investors to perform their own analysis of our gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities. We further compensate for the limitations of our use of non-GAAP financial measures by presenting the corresponding GAAP measures more prominently.

Qorvo will conduct a conference call at 5:00 p.m. EDT today to discuss today's press release.  The conference call will be broadcast live over the Internet and can be accessed by any interested party at http://www.qorvo.com (under "Investors").  A telephone playback of the conference call will be available approximately two hours after the call's completion and can be accessed by dialing 719-457-0820 and using passcode 3606094.  The playback will be available through the close of business May 10, 2017.

About Qorvo

Qorvo (NASDAQ:QRVO) makes a better world possible by providing innovative RF solutions at the center of connectivity. We combine product and technology leadership, systems-level expertise and global manufacturing scale to quickly solve our customers' most complex technical challenges. Qorvo serves diverse high-growth segments of large global markets, including advanced wireless devices, wired and wireless networks and defense radar and communications. We also leverage our unique competitive strengths to advance 5G networks, cloud computing, the Internet of Things, and other emerging applications that expand the global framework interconnecting people, places and things. Visit www.qorvo.com to learn how Qorvo connects the world.

Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and in other countries.  All other trademarks are the property of their respective owners.

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently.  You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements.  We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under the federal securities laws.  Qorvo's business is subject to numerous risks and uncertainties, including variability in operating results, the inability of certain of our customers or suppliers to access their traditional sources of credit, our industry's rapidly changing technology, our dependence on a few large customers for a substantial portion of our revenue, a loss of revenue if contracts with the U.S. government or defense and aerospace contractors are canceled or delayed, our ability to implement innovative technologies, our ability to bring new products to market and achieve design wins, the efficient and successful operation of our wafer fabrication facilities, assembly facilities and test and tape and reel facilities, our ability to adjust production capacity in a timely fashion in response to changes in demand for our products, variability in manufacturing yields, industry overcapacity and current macroeconomic conditions, inaccurate product forecasts and corresponding inventory and manufacturing costs, dependence on third parties and our ability to manage platform providers and customer relationships, our dependence on international sales and operations, our ability to attract and retain skilled personnel and develop leaders, the possibility that future acquisitions may dilute our shareholders' ownership and cause us to incur debt and assume contingent liabilities, fluctuations in the price of our common stock, additional claims of infringement on our intellectual property portfolio, lawsuits and claims relating to our products, security breaches and other similar disruptions compromising our information and exposing us to liability, and the impact of stringent environmental regulations.  These and other risks and uncertainties, which are described in more detail in Qorvo's most recent Annual Report on Form 10-K and in other reports and statements filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

Financial Tables to Follow

QRVO-F

  
QORVO, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(In thousands, except per share data) 
(Unaudited) 
  
 Three Months Ended Twelve Months Ended 
 April 1,
2017
 April 2,
2016
 April 1,
2017
 April 2,
2016
 
Revenue$642,992  $608,069  $3,032,574  $2,610,726  
         
Costs and expenses:        
Cost of goods sold411,396   353,869  1,897,062  1,561,173  
Research and development115,670  107,268  470,836  448,763  
Selling, general and administrative132,738  127,083  545,588  534,099  
Other operating expense7,644  11,372  31,029  54,723  
Total costs and expenses667,448   599,592  2,944,515  2,598,758  
         
(Loss) income from operations(24,456) 8,477  88,059  11,968  
Interest expense(13,674) (14,440) (58,879)  (23,316) 
Other income (expense), net842  3,242  (1,875) 8,486  
         
(Loss) income before income taxes$(37,288) $(2,721) $27,305  $(2,862) 
Income tax benefit (expense)93,196  (21,481) (43,863) (25,983) 
         
Net income (loss)$55,908  $(24,202) $(16,558) $(28,845) 
         
         
Net earnings (loss) per share, diluted$0.43  $(0.18) $(0.13) $(0.20) 
         
Weighted average outstanding diluted shares131,001  132,713  127,121  141,937  


 
QORVO, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 Three Months Ended
 April 1,
2017
 December 31,
2016
 April 2,
2016
      
GAAP operating (loss) income$(24,456) $61,381  $8,477 
Stock-based compensation expense15,554  16,655  25,308 
Amortization of intangible assets133,427  121,969  114,817 
Restructuring and disposal costs377  437  104 
IPR litigation costs  607  528 
Acquisition and integration related costs4,243  5,426  5,545 
Start-up costs3,399  2,207  3,069 
Other (including loss (gain) on assets and other non-cash expenses)876  (3) 2,719 
Non-GAAP operating income$133,420  $208,679   $160,567 
      
GAAP net income (loss)$ 55,908  $(78,638) $(24,202)
Stock-based compensation expense15,554  16,655  25,308 
Amortization of intangible assets133,427  121,969  114,817 
Restructuring and disposal costs377  437  104 
IPR litigation costs  607  528 
Acquisition and integration related costs4,243  5,426  5,545 
Start-up costs3,399  2,207  3,069 
Other (including loss (gain) on assets and other non-cash expenses)876  (3) 2,719 
Loss (gain) on investment  720  (2,629)
Adjustment of income taxes(102,035) 107,889  17,381 
      
Non-GAAP net income$111,749  $177,269  $142,640 
      
GAAP weighted average outstanding diluted shares131,001  126,852  132,713 
Diluted stock-based awards  4,616  4,769 
Non-GAAP weighted average outstanding diluted shares131,001  131,468  137,482 
      
Non-GAAP net income per share, diluted$0.85  $1.35  $1.04 
      


 
QORVO, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages)
(Unaudited)
  Three Months Ended
 April 1, 2017 December 31, 2016 April 2, 2016
GAAP gross profit/margin$231,596 36.0% $310,642 37.6% $254,200 41.8%
Adjustment for intangible amortization60,966 9.5% 49,508 6.0% 42,997 7.1%
Adjustment for stock-based compensation3,697 0.6% 5,179 0.6% 6,211 1.0%
Other non-cash expenses288 % 450 % 94 %
Non-cash deferred royalty revenue and equal and offsetting non-cash prepaid royalty amortization ($970)  0.1%  0.1%  0.1%
Non-GAAP gross profit/margin$296,547 46.2% $365,779 44.3% $303,502 50.0%


 Three Months Ended
Non-GAAP Operating IncomeApril 1, 2017
(as a percentage of sales) 
  
GAAP operating loss(3.8)%
Stock-based compensation expense2.4%
Amortization of intangible assets20.8%
Restructuring and disposal costs0.1%
Acquisition and integration related costs0.7%
Start-up costs0.5%
Other (including (gain) loss on assets and other non-cash expenses)0.1%
Non-GAAP operating income20.8%


 Three Months Ended
Free Cash Flow (1) April 1, 2017
(in millions) 
  
Net cash provided by operating activities$247.1 
Purchases of property and equipment(165.8)
Free cash flow$81.3 

(1) Free Cash Flow is calculated as net cash provided by operating activities minus property and equipment expenditures.


 
QORVO, INC. AND SUBSIDIARIES
ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
 
 Three Months Ended
 April 1, 2017 December 31, 2016 April 2, 2016
GAAP research and development expense$115,670  $111,951  $107,268 
Less:     
Stock-based compensation expense6,108  6,284  10,747 
Other non-cash expenses705  680  239 
Non-GAAP research and development expense$108,857  $104,987  $96,282 
      
      
 Three Months Ended
 April 1, 2017 December 31, 2016 April 2, 2016
GAAP selling, general and administrative expense$132,738  $130,672  $127,083 
Less:     
Stock-based compensation expense5,732  5,205  7,980 
Amortization of intangible assets72,461  72,461  71,820 
IPR litigation costs  607  528 
Other non-cash expenses275  286  102 
Non-GAAP selling, general and administrative expense$54,270  $52,113  $46,653 
      


 
QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 April 1, 2017 April 2, 2016
ASSETS   
Current assets:   
Cash and cash equivalents$545,463  $425,881 
Short-term investments   186,808 
Accounts receivable, net357,948  316,356 
Inventories430,454   427,551 
Other current assets127,740  152,614 
Total current assets1,461,605  1,509,210 
    
Property and equipment, net1,391,932  1,046,888 
Goodwill2,173,914  2,135,697 
Intangible assets, net1,400,563  1,812,515 
Long-term investments35,494  26,050 
Other non-current assets58,815  66,459 
Total assets$6,522,323  $6,596,819 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable and accrued liabilities$386,830  $343,253 
Other current liabilities31,998  30,548 
Total current liabilities418,828  373,801 
    
Long-term debt989,154  988,130 
Deferred tax liabilities131,511   152,160 
Other long-term liabilities86,108  83,056 
Total liabilities1,625,601  1,597,147 
    
Stockholders' equity4,896,722  4,999,672 
    
Total liabilities and stockholders' equity$6,522,323  $6,596,819 
        

 

At Qorvo



Doug DeLieto

VP, Investor Relations

336-678-5797



Mark Murphy

CFO

336-678-7975



At the Financial Relations Board

Joe Calabrese

Vice President

212-827-3772

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Source: Qorvo, Inc.

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